Lively Debate Seen Likely at IPTF Meeting on Online Transaction Licensing Language
The Department of Commerce Internet Policy Task Force’s planned Tuesday public meeting on communicating online transaction license terms and restrictions to consumers is likely to produce a lively debate among digital rights groups, content-side stakeholders and the tech sector, several officials said. But it’s unclear whether the IPTF will take more concrete steps like convening a proposed multistakeholder process to establish best practices for licensing language, amid perceptions of industry resistance, they said. The IPTF and the Patent and Trademark Office said the meeting is a follow-up to the task force’s 2016 white paper that opposed using legislation to address digital transmissions’ place in the existing first-sale doctrine. That paper recommended establishing voluntary best practices on licensing language (see 1601280065 and 1703200036). The meeting is set for 1-5 p.m. at the Global Intellectual Property Academy in PTO's Alexandria, Virginia, headquarters.
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IPTF is framing the meeting around a paper in the January University of Pennsylvania Law Review by Case Western Reserve University Law School professor Aaron Perzanowski that found language in end-user license agreements and terms of service that emphasizes that a purchase entitles a consumer only to a license of a work’s digital copy conflicts with language in advertising that emphasizes ownership of the digital copy. “Sophisticated institutional consumers like libraries will often be capable of reconciling marketing terms like ‘buy’ and ‘own’ with the more complex picture revealed by license terms,” he said in the paper. “But it remains to be seen whether and to what extent the average consumer is getting what she bargained for.” The FTC “offers an attractive remedy to bridge the gulf between the realities of the digital marketplace and consumers’ perceptions,” Perzanowski said in the paper. The agency “could bring the most relevant actors to the table to develop a more effective set of disclosures and rules. The FTC could then use its enforcement powers to police the digital media companies that continue to use misleading marketing methods.”
More than 86 percent of surveyed consumers in a study done in association with the paper who viewed a test website that used the term “buy now” believed the phrase conferred some form of rights over a digital copy of a work. Fifty percent of respondents who saw a test website that used the term “license now” believed that phrase conferred rights. Eighty-seven percent of survey respondents believed “buy now” gave them the right to keep the digital copy in perpetuity, while 81 percent believed the same of the term “license now,” Perzanowski said in the paper. The study included 333 respondents who saw “buy now” and 310 who saw “license now.”
The study found significantly fewer respondents believe they retained some form of ownership rights from a digital purchase when presented at the point of sale with a short notice listing what rights were included. The study included 327 respondents who viewed the short notice. “Although our short notice could undoubtedly be improved through testing alternative designs, placements, and interactions, it is a remarkably low-cost intervention,” Perzanowski said in the paper. “And where false consumer perceptions can be avoided at little cost, we might be especially inclined to impose a legal obligation to do so.”
“There’s going to be massive pushback” against the findings of the Perzanowski paper during the IPTF meeting, said an industry lobbyist. Officials from MPAA, ACT│The App Association, the Association of American Publishers, the Digital Media Association and the Entertainment Merchants Association are to speak during the meeting. The Copyright Office and academics are also to present during the meeting, but the tech sector in particular is concerned that IPTF focused the meeting on the Perzanowski paper, which a tech lobbyist said appeared to be based more on hypothetical concerns about consumer harm than consumers’ actual experience with the existing digital licensing model.
Digital rights interests likely will speak in favor of Perzanowski’s conclusions and cite them as a reason for at least convening the IPTF’s proposed multistakeholder process, a copyright policy observer said. Digital services are likely to be resistant to any effort to change their licensing models because they haven’t seen an outcry from the public, the observer said. “Any changes to this area of copyright law need to be very carefully deliberated” given that lack of public outcry, a tech lobbyist said.